================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2006
                                               ------------------

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

          For the transition period from ____________ to_____________

                        Commission file number 0 - 24012


                               KODIAK ENERGY INC.
                      -------------------------------------
             (Exact name of registrant as specified in its charter)


                Delaware                            65-0967706
     -------------------------------            -------------------
     (State or other jurisdiction of             (I.R.S. Employer
      incorporation or organization)            Identification No.)


            734 7th Ave S.W. Suite 460, Calgary, AB, T2P 3P8, Canada
            --------------------------------------------------------
               (Address of principal executive offices - Zip code)

                                 (403) 262-8044
                                ----------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

     Yes      No  X
         ---     ---

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

     Yes  X   No
         ---     ---

As of September 30, 2006, the Registrant had approximately 89,759,428 shares of
Common Stock, $.001 par value per share outstanding.




<PAGE>


                               KODIAK ENGERY INC.
                                      INDEX


                                                                            Page
                                                                            ----

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS                                                 3

         Condensed Consolidated Balance Sheets as of September 30, 2006
          (unaudited) and September 30, 2005                                  3

         Condensed Consolidated Statements of Operations (unaudited)
          for the three months and nine months ended September 30, 2006
          and 2005                                                            4

         Condensed Consolidated Statements of Cash Flows (unaudited)
          for the three months and nine months ended September 30, 2006
          and 2005                                                            5

         Notes to Condensed Consolidated Financial Statements                 6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION           10

ITEM 3.  CONTROLS AND PROCEDURES                                             12


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                   13

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                           13

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                     13

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  13

ITEM 5.  OTHER INFORMATION                                                   13

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                    14













                                        2

<PAGE>


KODIAK ENERGY, INC.
Consolidated Balance Sheets
(Development Stage Company
Going Concern Uncertainty - Note 1)

--------------------------------------------------------------------------------
                                                                   December 31,
                                                                       2005
                                                  September 30,     (Audited)
                                                      2006          (Restated-
                                                   (Unaudited)        Note 2)
--------------------------------------------------------------------------------
Assets

Current Assets
     Cash                                        $     482,181   $     190,651
     Other Receivables                                 547,183          12,676
     Prepaid Expenses                                   24,117          67,850
     ---------------------------------------------------------------------------
                                                     1,053,481         271,177

Other Assets (Note 3)                                   24,654          20,249
--------------------------------------------------------------------------------
                                                     1,078,135         295,426
--------------------------------------------------------------------------------
Property, Plant & Equipment
     Oil & Gas Properties     (Note 4)               1,476,076         250,318
     ($1,379,441 unproven properties
       excluded from costs amortized;
     Dec 31, 2005 - $250,318)
     Property & Equipment     (Note 4)                  51,104          15,821
     Accumulated Amortization (Note 4)                 (38,696)         (1,235)
     ---------------------------------------------------------------------------
                                                     1,488,484         264,904
--------------------------------------------------------------------------------
                                                     2,566,619         556,330
================================================================================

Liabilities and Shareholders' Equity

Current Liabilities
     Accounts Payable                                   64,161           28,553
     Accrued Liabilities                               128,387          153,859
     Convertible Debt (Note 5)                               -           41,189
     ---------------------------------------------------------------------------
                                                       192,548          223,601

Asset Retirement Obligations (Note 6)                   65,208                -
--------------------------------------------------------------------------------
                                                       257,756          223,601
--------------------------------------------------------------------------------
Shareholders' Equity

Share Capital
     300,000,000 Authorized:
        (2005  100,000,000) Common Shares
          Par Value .001 Each

     Issued & Outstanding 89,759,428
              (2005 - 474,028)(Note 7)                  89,759              474
     Shares to be Issued (Note 7)                            -          773,637
         Share Subscription Receivable                       -          (72,000)
         Additional Paid in Capital (Note 7)         4,908,354          834,561
     Deficit Accumulated during the
           Development Stage                        (2,680,977)      (1,196,403)
     Accumulated Other Comprehensive Loss               (8,273)          (7,540)
     ---------------------------------------------------------------------------
                                                     2,308,863          332,729
--------------------------------------------------------------------------------

                                                 $   2,566,619   $      556,330
================================================================================

(See accompanying notes to the unaudited consolidated financial statements)


                                       3
<PAGE>
<TABLE>
<CAPTION>

KODIAK ENERGY, INC.
Consolidated Statements of Operations - Unaudited
(Development Stage Company
Going Concern Uncertainty - Note 1)



                                                                                             Cumulative Since
                                      Three          Three          Nine           Nine         Inception
                                      Months         Months        Months         Months       Apr 7, 2004
                                     Sept 30,       Sept 30,      Sept 30,       Sept 30,      to Sept 30,
                                       2006           2005          2006           2005            2006

<S>                                <C>              <C>          <C>             <C>           <C>
REVENUES, NET OF ROYALTIES         $     10,331     $      -     $    10,331     $      -      $      10,331
                                   -------------------------------------------------------------------------

EXPENSES
   Operating Costs                        5,010            -           5,010            -              5,010
   Administrative                       266,867        2,744         700,910       11,231          1,062,267
   Compensation Expense (Note 8)              -            -         337,500            -            337,500
   Interest Expense                           -            -               -            -            808,811
                                   -------------------------------------------------------------------------
   Loss Before Other Expenses          (261,555)      (2,744)     (1,033,089)     (11,231)        (2,203,257)
Other Expenses
   Depletion, Depreciation and
      Accretion                         (35,224)           -         (40,372)           -            (41,607)
    Writedown of Oil and Gas
      Properties                       (411,113)           -        (411,113)           -           (411,113)
Loss from valuation adjustment                -            -               -            -            (25,000)
                                   -------------------------------------------------------------------------
                                       (446,337)           -        (451,485)           -           (477,780)
                                   -------------------------------------------------------------------------
NET LOSS                           $   (707,893)    $ (2,744)    $(1,484,574)    $(11,231)     $  (2,680,977)



BASIC AND DILUTED LOSS PER
  COMMON SHARE                     $      (0.01)    $  (0.00)    $     (0.02)    $  (0.02)

WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING                 89,759,428      474,028      62,327,073      473,558

</TABLE>



(See accompanying notes to the unaudited consolidated financial statements)





                                       4
<PAGE>

<TABLE>
<CAPTION>

KODIAK ENERGY, INC.
Consolidated Statements of Cash Flows - Unaudited
(Development Stage Company
Going Concern Uncertainty - Note 1)

                                                                                             Cumulative Since
                                       Three          Three         Nine           Nine          Inception
                                       Months         Months       Months         Months        Apr 7, 2004
                                      Sept 30,       Sept 30,     Sept 30,       Sept 30,       to Sept 30,
                                        2006           2005         2006           2005             2006

<S>                                  <C>             <C>         <C>             <C>             <C>
OPERATING ACTIVITIES
Net Loss                             $ (707,893)     $(2,744)    $(1,484,574)    $(11,231)       $(2,680,977)
Adjustments to reconcile net
loss to net cash used in
operating activities:
   Depletion, Depreciation and
     Accretion                           35,224            -          40,372            -             41,607
   Contributions To Capital                   -          900               -          900                900
   Foreign Currency Translation          (3,825)           -            (733)           -             (7,949)
   Compensation Expense                       -            -         337,500            -            337,500
   Interest Expense                           -            -               -            -            808,811
   Writedown of Oil and Gas
     Properties                         411,113            -         411,113            -            411,113
Loss From Valuation Adjustment                -            -               -            -             25,000
Changes in Non-Cash Working Capital
Components:
  Change In Other Receivables           (74,879)           -        (177,074)           -           (189,750)
  Change In Prepaid Expenses              7,344            -          33,733            -            (24,117)
  Change In Accounts Payable            (27,319)           -         (17,180)           -              4,373
  Change In Accrued Liabilities        (198,760)       1,844         (87,604)      10,331             21,895
  Change In Convertible Debt                  -            -         (41,189)           -                  -
                                     ------------------------------------------------------------------------

Net Cash Used in Operating
   Activities                          (558,994)           -        (985,636)           -         (1,251,594)

Investment Activities
   Additions to Property, Plant
      & Equip                          (701,253)           -      (1,609,857)           -         (1,875,995)
   Additions to Other Assets               (305)           -            (405)           -            (24,654)
   Change In Other Receivables         (342,958)           -        (357,433)           -           (357,433)
   Change In Accounts Payable           (73,489)           -          52,788            -             59,787
   Change In Accrued Liabilities        106,492            -          62,132            -            106,492
                                     ------------------------------------------------------------------------
Net Cash Used in Investing
   Activities                        (1,011,513)           -      (1,856,775)           -         (2,091,803)

Financing Activities
   Shares issued                              -            -       3,825,578            -          3,825,578
   Share Subscription Receivables        90,000            -          72,000            -                  -
   Change In Prepaid Expenses                 -            -          10,000            -                  -
   Shares to be Issued                        -            -        (773,637)           -                  -
                                     ------------------------------------------------------------------------
Net Cash Provided by Financing
   Activities                            90,000            -       3,133,941            -          3,825,578

Net Cash Increase (Decrease)         (1,480,507)           -         291,530            -            482,181
Cash beginning of Period              1,962,688            -         190,651            -                  -
                                     ------------------------------------------------------------------------
Cash end of Period                   $  482,181            -     $   482,181                     $   482,181
                                     ------------------------------------------------------------------------

</TABLE>


(See accompanying notes to the unaudited consolidated financial statements)





                                       5
<PAGE>

KODIAK ENERGY, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
For the Three and Nine Month Period Ended September 30, 2006
Stated in U.S. dollars


1.   ORGANIZATION, BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY

The interim consolidated financial statements include the accounts of Kodiak
Energy Inc. and subsidiaries (collectively "Kodiak", the "Company", "we", "us"
or "our") as at September 30, 2006 and December 31, 2005 and for the periods
ended September 30, 2006, September 30, 2005 and the period from April 7, 2004
(inception) until September 30, 2006, presented in accordance with generally
accepted accounting principles in the United States of America ("U.S. GAAP") on
the same basis as the audited consolidated financial statement as at and for the
period ended December 31, 2005, except as outlined in Note 2. These interim
consolidated financial statements should be read in conjunction with December
31, 2005 audited consolidated financial statements and the notes thereto.
Interim results are not necessarily indicative of results expected for the
fiscal year. These interim consolidated financial statements have not been
audited.

The Company was incorporated under the laws of the state of Delaware on December
15, 1999 under the name "Island Critical Care, Corp." with authorized common
stock of 50,000,000 shares with a par value of $.001. On December 30, 2004 the
name was changed to "Kodiak Energy, Inc." and the authorized common stock was
increased to 100,000,000 shares with the same par value. On January 17, 2005 the
Company affected a reverse split of 100 outstanding shares for one share. These
consolidated financial statements have been prepared showing post split shares
from inception. The Company was engaged in the development of the manufacture
and distribution of medical instrumentation and it became inactive after the
bankruptcy outlined below.

The Company is in the development stage and its efforts have been principally
devoted to capital raising, organizational infrastructure development, and
acquisitions of oil and gas properties for the purposes of future extraction of
the resources.

Bankruptcy
----------

On February 5, 2003 the Company filed a petition for bankruptcy in the District
of Prince Edward Island, Division No. 01-Prince Edward Island Court No. 1713,
Estate No. 51-104460, titled "Island Critical Care Corp.". The Company emerged
from bankruptcy pursuant to a Bankruptcy Court Order entered on April 7, 2004
with no remaining assets or liabilities and adopted Fresh Start Accounting.

The terms of the bankruptcy settlement included the authorization for the
issuance of 150,000 post split restricted common shares in exchange for $25,000,
which was paid into the bankruptcy court by the recipient of the shares.

The Company emerged from bankruptcy as a development stage company.

Going Concern Uncertainty
-------------------------

These consolidated financial statements have been prepared assuming the Company
will continue as a going concern, which presumes the realization of assets and
discharge of liabilities in the normal course of business for the foreseeable
future. The Company has not generated positive cash flow since inception and has
incurred recurring operating losses and will need working capital for its future
planned activities. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Continuation of the Company as a going
concern is dependent upon obtaining sufficient working capital to finance
ongoing operations. The management of the Company has developed a strategy to
address this uncertainty, including additional loans from officers, and equity
funding, however there are no assurances that any such financing could be
obtained on favorable terms, if at all.



                                       6
<PAGE>

2.   RESTATEMENT

In November 2006, we determined that it was necessary to restate our financial
results for the year ending December 31, 2005 and for the periods ending March
31, 2006 and June 30, 2006. The purpose of the restatements is to correct errors
found in accounting for transactions resulting from a lack of adequate
procedures necessary to ensure that records were maintained in reasonable detail
to fairly reflect the transactions of the Company in the start up phase of
operations.

For the impact of the errors on the December 31, 2005 financial statements sheet
refer to the Amended Form 10-KSB/A for the year ended December 31, 2005.

3.   OTHER ASSETS

Other Assets in the amount of $24,117 represents a long term deposit required by
regulatory authorities for environmental obligations for well abandonment and
restoration in Alberta.

4.   PROPERTY, PLANT & EQUIPMENT


                                                      Net Book       Net Book
                                       Accumulated      Value          Value
                                      depreciation     Sept 30,     December 31,
                           Cost       and depletion     2006           2005
                                                                   (As Restated-
                                                                      Note 2)
Canada:
Oil and gas properties  $ 1,227,205    $  30,634     $ 1,196,571   $    118,318
United States:
Oil and gas properties      248,871           --         248,871        132,000
                        --------------------------------------------------------

Sub-Total                 1,476,076       30,634       1,445,442        250,318
                        --------------------------------------------------------

Furniture & fixtures         51,104        8,062          43,042         14,586
                        --------------------------------------------------------

Total                     1,527,180     $ 38,696     $ 1,488,484   $    264,904

The aggregate amount of capitalized costs of unproved properties and major
development projects excluded from the costs amortized at September 30, 2006 is
$1,379,441.

The Company recognized an impairment loss of $411,113 expense for the period
ended September 30, 2006. The Company capitalized $14,957 (2005 - nil) of Asset
Retirement Obligations during the three month period ending September 30, 2006
and for the nine month period ending September 30, 2006 $62,296 (2005 - Nil) was
capitalized.

5.   CONVERTIBLE DEBT

Debt of $41,189 at December 31, 2005 was non-interest bearing and convertible to
common shares of the Company pursuant to the stock for services compensation
plan. A beneficial conversion feature of $808,811 was calculated on the debt for
the year ended December 31, 2005 representing the difference between the
conversion price and the fair value of the common stock at the commitment date.
This amount is recorded as interest expense and an increase in additional paid
in capital. The Company issued 1,000,000 shares in January, 2006 to settle this
debt pursuant to the stock for services compensation plan. Debt was reduced by
$41,189 and Shares Issued increased by $1,000 and Additional Paid in Capital
increased by $40,189.



                                       7
<PAGE>

6.   ASSET RETIREMENT OBLIGATIONS

Changes in the carrying amounts of the asset retirement obligations associated
with the Company's oil and natural gas properties are as follows:

  ----------------------------------------------------------------------------
                                                                        2006
  ----------------------------------------------------------------------------
  Asset retirement obligations, December 31, 2005                           -
  ----------------------------------------------------------------------------
  Obligations incurred during period                                   62,296
  ----------------------------------------------------------------------------
  Accretion                                                             2,912
  ----------------------------------------------------------------------------
  Asset retirement obligations, September 30, 2006                     65,208
  ----------------------------------------------------------------------------

At September 30, 2006 the estimated total undiscounted amount required to settle
the asset retirement obligations was $ 102,285. These obligations will be
settled at the end of the useful lives of the underlying assets, which currently
extends up to 8 years into the future. This amount has been discounted using a
credit adjusted risk-free interest rate of 7.5% and a rate of inflation of 2.5%.

7.   SHARE CAPITAL

Authorized:
     300,000,000 (2005 - 100,000,000) common shares at $0.001 par value

--------------------------------------------------------------------------------
                                                                Additional Paid
                                        Number       Value        in Capital
--------------------------------------------------------------------------------
Balance at September 30, 2005 and
 December 31, 2005                      474,028   $    474       $   834,561
--------------------------------------------------------------------------------
Private Placement, net of issue
 costs (26,363)                      16,000,000     16,000           756,656
--------------------------------------------------------------------------------
Private Placement, net of issue
 costs (140,000)                        933,324        933         1,259,067
--------------------------------------------------------------------------------
Shares issued for service             1,000,000      1,000            40,189
--------------------------------------------------------------------------------
2:1 Stock split                      18,407,362     18,408          (18,408)
--------------------------------------------------------------------------------
Shares issued for service, net
 issue of costs (15,526)              7,500,000      7,500           314,973
--------------------------------------------------------------------------------
2:1 Stock split                      44,315,184     44,314          (44,314)
--------------------------------------------------------------------------------
Private Placement, net of issue
 costs (153,740)                      1,130,000      1,130         1,766,130
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Balance September 30, 2006           89,759,428   $ 89,759       $ 4,908,354
--------------------------------------------------------------------------------

At the annual general meeting held on July 18, 2006, the shareholders of the
Company voted in favor of increasing the authorized common shares to
300,000,000.

On January 13, 2006 16,000,000 shares were issued pursuant to two private
placements for which a portion closed December 22, 2005 (13,650,000 shares for
gross proceeds of $300,000 - Note 9) and December 30, 2005 (910,000 shares,
$500,000) respectively reported as "Shares to be Issued" at December 31, 2005 in
the amount of $773,637 (net of share issue costs of $26,363) as the share
certificates were not issued until January 13, 2006.

The Company closed a private placement in January for 933,324 common shares at a
price of $1.50 per share for gross proceeds of $1,400,000.

The Company issued 1,000,000 common shares to settle debt of $41,189 (Note 5)
pursuant to the stock for services compensation plan. A beneficial conversion
feature of $808,811 was calculated on the debt for the year ended December 31,
2005 representing the difference between the conversion price and the fair value
of the common stock at the commitment date. This amount is recorded as interest
expense and an increase in additional paid in capital for the year ended
December 31, 2005.

                                       8
<PAGE>

On February 20, 2006 the Company's stock split forward by paying a stock
dividend to our existing shareholders. All shareholders of record on February
14, 2006 received 1 dividend share for every share they owned amounting to
18,407,362 shares of common stock issued.

During 2006, the Company issued 7,500,000 common shares, pursuant to an S8
registration, for services provided to the Company for corporate development
that have been recorded under the provisions of SFAS No. 123R relating to
transactions with non-employees where the fair value of the shares issued
($337,500 - Note 8) has been recorded as a Compensation Expense and an increase
in Additional Paid In Capital (less share issue costs of $15,526.

On May 1, 2006 the Company's stock split forward by paying a stock dividend to
our existing shareholders. All shareholders of record on April 28, 2006 received
1 dividend share for every share they owned amounting to 44,315,184 shares of
common stock issued.

The Company closed a private placement in June for 1,130,000 units at a price of
$1.70 per unit for gross proceeds of $1,921,000. Each unit entitled the
subscriber to one common share of the Company and one warrant.

Warrants

Pursuant to a private placement in June, 2006 the Company has 1,130,000 warrants
outstanding as of September 30, 2006. Each warrant entitles the warrant holder
to exchange one warrant for one common share at a price of $2.50 until June 30,
2008 and $3.50 from July 1, 2008 to June 30, 2011.

8.   RELATED PARTY TRANSACTIONS

An officer-director acquired 150,000 shares, post split, of the common capital
stock issued at the emergence from bankruptcy on April 7, 2004, for $25,000.

Officers and directors of the Company purchased 10,200,000 shares of the common
capital stock of the Company on December 22, 2005 at $0.02 per share for
$204,000. These shares were not issued by the Transfer Agent until January 13,
2006 and were reflected in shareholders' equity as part of the caption "Shares
to be Issued" at December 31, 2005.

For the nine months ended September 30, 2006, the Company paid Sicamous Oil &
Gas Consultants $62,191 (September 30, 2005 -$40,744) for consulting services
rendered by the COO. Sicamous Oil & Gas Consultants is a company owned by our
Chief Operating Officer, Mr. William Tighe.

For the nine months ended September 30, 2006, the Company paid MHC Corporation
$40,080 (September 30, 2005-$27,897) for consulting services rendered by the
CEO. MHC Corporation is a company owned by our Chief Executive Officer, Mark
Hlady.

During the nine months ended September 30, 2006 the Company paid $61,087
(September 30, 2005 -$131,156) to companies which beneficially own 8.1% of the
Company for investor relations services. Investor relations services in the
amount of $46,087 are included in Administrative Expenses and Prepaid Expenses
in the amount of $15,000(September 30, 2005 $54,793 are included in
Administrative Expense and $26,363 were commissions on a private placement
included in Additional Paid in Capital and a retainer in the amount of $50,000
in Prepaid Expenses).

During the nine months ended September 30, 2006 the Company paid 2,000,000
shares for service to an individual whom beneficially owns 8.1% of the Company
for corporate development services. The shares were valued at market price of
$90,000 and were recorded as Compensation Expense and an addition to Additional
Paid in Capital.


                                       9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

All statements contained herein that are not historical facts, including, but
not limited to, statements regarding the Company's current business strategy,
the Company's projected sources and uses of cash, and the Company's plans for
future development and operations, are based upon current expectations. These
statements are forward-looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are the following: the
availability of sufficient capital to finance the Company's business plans on
terms satisfactory to the Company; competitive factors; changes in labor,
equipment and capital costs; changes in regulations affecting the Company's
business; future acquisitions or strategic partnerships; general business and
economic conditions; and factors described from time to time in the reports
filed by the Company with the Securities and Exchange Commission. The Company
cautions readers not to place undue reliance on any such forward-looking
statements, which statements are made pursuant to the Private Litigation Reform
Act of 1995 and, as a result, are pertinent only as of the date made.

PLAN OF OPERATION

The Company commenced production in the third quarter ended September 30, 2006
from a gas well at GranLea which was drilled in the same quarter. In the next
twelve months Kodiak plans to progressively and methodically develop its asset
base.

Canada

Manyberries - Alberta Kodiak drilled two wells in March of 2006 on the
Manyberries property. The Company will earn 100% of the project after drilling
three shallow gas wells. To date, two wells have been drilled and one
recompleted and a substantial amount of seismic information purchased and
processed. We expect to drill the third well in the fourth quarter of 2006. In
the next twelve months we plan to drill more shallow gas wells and complete a 3D
seismic program to prove the existence of deeper oil plays. Upon confirmation of
sufficient reserves, pipelines will be constructed to tie the wells into
existing gas facilities.

Granlea -Alberta
A 2D seismic program was completed on the Granlea property, a well
drilled/completed to the Sawtooth formation, surface facilities installed, and a
pipeline completed. Production was started in late Q3. Based on production
results, additional drilling and land acquisitions in the area will be
considered.

Lucy Area - northern BC
Kodiak, has a 10% working interest in a well in Northern British Columbia,
located 40 miles northeast of Fort Nelson, targeting natural gas. The well is
expected to spud in the fourth quarter of 2006.

Little Chicago NWT

Kodiak Energy has signed a farmin agreement to earn up to a 56.25% working
interest on the 200,000 acre Exploration License 413 ("EL 413") in the Mackenzie
River Valley and centered along the planned Mackenzie Valley Pipeline.

Kodiak Petroleum ULC will be the initial Operator under the joint operating
procedure and will spend five million dollars ($5,000,000.00) prior to June 30,
2007, to acquire 2D seismic data on the Farmout Lands, thus earning a 12.5%
working interest in the properties. Kodiak will drill two test wells the
following winter on the Farmout Lands to earn an undivided 50% of the balance of
the Farmor's interest in two 20,000 acre test well blocks. The Company will have
a continuing rolling option to drill additional Option Well(s) on the remaining
unearned "20,000 acre test well block(s)".

Subsequent to this farmout - Kodiak has signed a participation agreement with
Source Energy Ltd of Calgary to share the initial development costs. By funding
55% of the seismic costs, Source will earn an undivided 5.25% of the EL413
working interest. By funding 35% of the drilling costs, Source will earn 15% of
the test blocks.

Kodiak shall remain as the operator with an overall working interest of 36% on
the first two blocks and 40% on all subsequent blocks.



                                       10
<PAGE>

Montana

Two wells were drilled in the third quarter, one is cased for subsequent
evaluation of the multiple zones found and one was abandoned. A third well is
licensed and will be drilled depending upon the results of testing on the first
well. Subsequent to the drilling, any successful wells will be tied into
existing facilities in 2007. We have allocated approximately $400,000 for this
project for the 1st quarter of 2007.

New Mexico

Kodiak Energy, Inc. has entered into a joint venture agreement on 50,000 acres
of property located in Northeast New Mexico. Once Kodiak acquires seismic the
Company will earn an undivided 12.5% working interest in all the existing
leases.

In consideration for drilling and casing, or abandonment, of each of the three
test wells and the re-entry of an existing borehole, Kodiak shall earn a 100%
working interest in each well, on a well by well basis, (being an 84% net
interest) before payout for that well and a 50% working interest after payout.
Prior to payout Thunder will retain a standard sliding scale (5% to 15%) royalty
on oil and 15% on natural gas and after payout the royalty shall convert to a
50% Working Interest on a well by well basis.

In further consideration of drilling and casing, or abandonment, of each of the
three test wells and the re-entry of the existing borehole, Kodiak shall earn a
sliding scale working interest of up to 3,200 acres.

For fulfilling its obligation to drill the wells described above, Kodiak will
earn an option to continue to drill additional wells and to earn an undivided
50% working interest in the petroleum and natural gas rights for the applicable
after earned acreage amounts. The exact timing of such rolling options is to be
mutually determined by Kodiak and Thunder River.

Unless otherwise agreed by all parties, Kodiak shall be the sole operator of all
wells drilled pursuant to this letter and Thunder River shall act as an advisor.

In the event of a commercial discovery, Thunder River will participate in any
follow-up drilling and development of these prospects.

Kodiak will also have the right to participate with Thunder River in the
acquisition of surrounding leases covering the initial prospects, and in
addition, Kodiak will have the right to participate in future Thunder River New
Mexico prospect lease acquisitions.

Utah
Kodiak had signed a letter of intent for 22% of a heavy oil project in Utah.
Upon completion of due diligence the Company will not be proceeding with this
project as there were land schedule deficiencies.

Financial Condition and Changes in Financial Condition

The Company had revenue net of royalty of $10,331 for the quarter ended
September 30, 2006 from a gas well at Granlea with an average gas price of
$3.54/mcf. The well produced 3,305 mcf in the month of September (averaged 110
mcf/d in the month).

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<PAGE>

Operating costs were $5,010 or $1.52/mcf and royalties averaged 15% of gas
sales.

Net Loss for the quarter ended September 30, 2006 totaled $708,268. The majority
of the net loss relates to $411,113 of depletion, depreciation and accretion
expense as an impairment loss on the Granlea property.

Administrative expenses of $267,192 relate to consulting, public company
expenses, audit fees, general and administration and legal costs.

Net loss for the quarter ended September 30, 2005 totaled $2,744. The expenses
relate to general and administrative costs.

Liquidity and Capital Resources:

Since inception to September 30, 2006, we have funded our operations from the
sale of securities and loans from shareholders.

As of September 30, 2006, our assets totaled $2,566,619, which consisted
primarily of oil and gas mineral rights and land in Canada and Montana. Our
total liabilities were $192,548, which were primarily accounts payable for audit
fees and administrative expenses. We had stockholders' equity of $2,308,863.

On January 20, 2006 Kodiak Energy raised gross proceeds of $1,400,000 through
the sale of 933,324 common shares at a price of $1.50 per share. Kodiak Energy
used the funds for drilling two wells at the Manyberries property, and general
corporate purposes. On June 30 Kodiak Energy raised gross proceeds of $1,921,000
through the sale of 1,130,000 units at a price of $1.70 per share. The units
consisted of one common share and one warrant to purchase a share for $2.50
until June 30, 2008 and $3.50 from July 1, 2008 until June 30, 2011. The funds
were used to drill two wells in Montana and general corporate purposes. As at
September 30, 2006 the working capital was $885,587.

RAISING CAPITAL

The Company currently lacks the capital resources to fully implement and carry
out its business plan as described herein. At some point in the future we expect
to raise additional capital, either through debt, equity or any combination
thereof. In the event that additional capital is raised at some time in the
future, existing shareholders will experience dilution of their interest in the
Company.

ITEM 3.  CONTROLS AND PROCEDURES

Restatement

During the process of preparing for the Company's third quarter financial report
the CFO identified errors in the accounting records that originated in the
fourth quarter of 2005, the first quarter ended March 31, 2006 and the second
quarter ended June 30, 2006. The errors arose as a result of a lack of adequate
procedures and documentation necessary to ensure that records were maintained in
reasonable detail to fairly reflect the transactions of the Company in the start
up phase of operations.

After discussing these matters with management the CFO recommended to the Audit
Committee that previously reported financial results be restated to reflect
correction of these errors. The Audit Committee agreed with this recommendation.
Pursuant to the recommendation of the Audit Committee, the Board of Directors
determined at its meeting on November 3, 2006, that previously reported results
for the Company be restated to correct these errors and, in light of the
restatement, that the financial statements and other information referred to
above should no longer be relied upon.

Evaluation of Disclosure Controls and Procedures

The CFO evaluated the disclosure controls and procedures and identified a lack
of sufficient procedures, documentation and qualified personnel to ensure the
records fairly reflected the transactions of the Company resulting in a material
weakness in the Company's internal control over financial reporting. Solely as a
result of the material weakness, management concluded that the disclosure
controls and procedures were not effective as of December 31, 2005, March 31,
2006 or June 30, 2006.

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Remediation of Material Weakness in Internal Control

As of the date of this filing the CFO is in the process of designing disclosure
controls and procedures to be implemented to ensure the records fairly reflect
the transactions of the Company. The remedial actions include:

      *   Designing adequate disclosure controls and procedures for the Company
      *   Implementing the disclosure controls and procedures
      *   Testing the effectiveness of the implemented disclosure controls and
          procedures
      *   Reporting the results of the tests of effectiveness to management,
          Audit Committee and Board of Directors

In connection with the amended Form 10-K, under the direction of the Chief
Executive Officer and Chief Financial Officer, we have evaluated our disclosure
controls and procedures as currently in effect, including the remedial actions
discussed above, and we have concluded that, as of this date, our disclosure
controls and procedures are not effective.

As previously reported, there was no change in our internal control over
financial reporting during the quarter year ended December 31, 2005, that
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting. However, subsequent to June 30, 2006, we are
taking the remedial actions described above.


                           PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

None.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None


Item 5. OTHER INFORMATION

None.


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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

   31.1 - Certification of President Pursuant to Section 302 of the
          Sarbanes-Oxley Act of 2002

   31.2 - Certification of Chief Financial Officer to Section 302 of the
          Sarbanes-Oxley Act of 2002

   32   - Certification of President and Chief Financial Officer Pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002

REPORTS ON FORM 8-K

On August 25, 2006 we filed an 8K under item 5.02 Election of Directors and
Appointment of Principal Officers.

On Auust 28, 2006 we filed an 8K under item 1.01 Entry into a Material
Definitive Agreement

                                   SIGNATURES
                                   ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                              KODIAK ENERGY, INC.
                                               (Registrant)


Dated: December 13, 2006                      By: /s/  Mark Hlady
                                              ---------------------------------
                                              Mark Hlady
                                              CEO, and Chairman















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